Prescriptions for a Diseased Pharmaceutical Industry

We always hear about people who have won the lottery and donated to charity, but if a charity wins the lottery, we don’t expect them to give up their winnings. Doctors Without Borders (Médecins Sans Frontières) has done just that. Nearly 90 percent of all the money this Nobel Peace Prize laureate receives goes to providing emergency medical care for those caught in crises all over the world [3]. So when pharmaceutical giant Pfizer offered to donate one million pneumonia vaccines, it should have been like winning the lottery. According to the World Health Organization, pneumonia is the leading infectious cause of death in children (1.4 million deaths in children under 5 each year) and causes seven percent of all deaths worldwide [8]. Shockingly however, MSF refused this offer last October. MSF declared that pervasive problems in the pharmaceutical industry—such as using patents to generate monopolies—meant it could not accept the donation in good faith.

Many argue that MSF could have saved lives by accepting the donation, yet the organization continues to defend their decision. Accepting the donation would mean accepting the status quo: that those who cannot afford basic medicine should die for not being born in a first world country. Pfizer could use donations like these to justify high prices, denying access to developing countries and other humanitarian organizations [2]. These people cannot rely on sporadic windfalls from Pfizer to combat widespread diseases like pneumonia. By rejecting the donation, MSF is taking a stand for lower prices overall.

Last year, Pfizer made $6.245 billion off of the Prevnar 13 pneumonia vaccine alone through exorbitant pricing [5]. To put this in perspective, that amount could send roughly 47,000 students to a private college for a full four years. The one million vaccines Pfizer offered sounds impressive for their public image, but the donation is a mere drop in the ocean compared to how much they make overall. Pharmaceutical industries make these large profits because they overcharge countries that can afford their steep prices, such as the United States. But the poorer countries that MSF operates in are completely out of luck if they cannot pay for lifesaving drugs and vaccines. Why, then, are pharmaceutical companies allowed to charge so much?

The main reason is the use of patents to monopolize the industry. Invention and the spirit of ingenuity have always been part of the American dream since the first patent was issued in 1790 [7]. The patent plays an essential role in protecting the inventor and giving financial motive for discovery. A patent is meant to give the inventor a temporary monopoly on their product, generating revenue and preventing their idea from being stolen and sold by competitors. This helps cover research and development costs and creates incentive for innovation. However, pharmaceutical industries have been abusing patent protection to completely monopolize essential drugs and vaccines, keeping them from developing countries and humanitarian organizations like MSF who cannot purchase them at high prices.

Normal drug patents last between 15 and 20 years after invention, and there is an average of eight years before a drug is approved for distribution. Pharmaceutical companies respond to this long approval process by rushing through drug trials and by searching for loopholes to extend their monopoly [4]. Pharmaceuticals can exploit the system by applying for another patent on the same drug once the original has expired, which can be stalled in courts. They might also patent the process by which the drug is made or the special delivery system for the drug after the original patent expires. They could make a slight alteration and get another patent for what is essentially the same drug, a process called “evergreening” [1]. If they challenge a competitor’s drug in court, the competitor must pull their version off of shelves until it is resolved or 30 months have passed. In 2014 alone, 323 of these law suits were filed, according to the Wall Street Journal, a number which continues to grow [9]. This not only allows companies to charge extremely high prices because they have no competitors, but discourages actual innovation. No one tries to improve their design, and companies pour funds into lawsuits protecting their patents instead of research.

Take, for instance, what is happening with the Epipen. For those with severe allergies, it can buy precious minutes on the way to the hospital. Drugmaker Mylan holds the patent (though Pfizer manufactures it), and it does not expire until 2025. Epipens are clunky, have a poor shelf life, and are not user-friendly. However, Mylan recently struck down an attempt by SK Chemicals to produce its own formula and has sued others who have invented smaller injection mechanisms. Mylan has not improved the Epipen, because having a shorter shelf-life forces people to buy more of the product, yet despite its deficiencies the sticker price has spiked by 400 percent [6]. Mylan faces no competitors because of patent protection, and as the sole provider, it can charge whatever price it wants for an imperfect product.

Though morally dubious, the drug patenting system is completely legal. Companies can raise their prices as high as they want in order to maximize profit. That is how capitalism works, but abuse of the patent system, combined with the long drug approval process, is seriously hurting consumers. For those in developed countries, it costs more money. For those in third world countries, it costs more lives, which is why humanitarian organizations are desperately fighting for prices that will allow them to distribute to the regions that need medicine most.

There needs to be change in the patent system. A drug company cannot be allowed to apply for several new patents after the original expires. Evergreening only benefits companies while providing little improvement for patients. Unless a new drugs is significantly improved from its previous form, it should not receive a patent. In addition, patent protection for drugs should begin after approval, not during the long approval process. This will make companies more likely to be thorough in their drug trials, and will make their product safer for consumers. There are many larger issues with the pharmaceutical industry that are difficult to change, such as the focus on developing drugs that treat instead of prevent illness, but patent law is not an issue consumers are powerless on.

Developed countries may be able to afford price spikes, but most cannot and are thus denied access to life-saving medicine. Widespread access has personal benefits, too. If everyone around you is immune (herd immunity), it becomes harder for diseases to spread. The public has an enormous role in creating access. When HIV medicine pricing spiked by 5,500 percent, public outcry forced the company to lower prices and sparked a movement to develop a one-dollar per pill alternative (and also made company CEO Martin Shkreli one of the most hated people on the internet). MSF has also had some success in convincing Pfizer to lower the price of Prevnar 13 because of the attention it drew. Publicizing the issue is essential, because most people won’t understand pages of legal jargon about patent law until it is dragged out of the courtrooms and on to their Facebook page in simple terms. Public pressure is essential to forcing companies to change, and it could be as easy as signing a petition or writing to your representatives in Congress.